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NW Indiana Officials Indicted On Corruption Charges

1040 Federal Tax Return (credit: AP)

1040 Federal Tax Return (credit: AP)

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HAMMOND, Ind. (CBS) – Federal indictments rained down Thursday on three Lake County elected officials, a former Merrillville Town Court clerk, the former director of the East Chicago Public Library and a Munster businessman.

U.S. Attorney David Capp announced the grand jury charges that followed investigations conducted by the Northern District of Indiana’s Public Corruption Task Force.

Public corruption indictments announced are:

Gary Common Councilwoman Marilyn Krusas, 69 — charged with one count of tax evasion. The indictment claims Krusas, who has served as a councilwoman since 2000, hasn’t filed a federal income tax return since 1991. In 2001, the IRS started sending her notices of taxes and penalties owed that eventually added up to $157,413. However, according to the indictment, when she received in 2009 and 2010 inheritance payments totaling $232,680, she used the money to pay down other debt and to write $110,000 in cashier’s checks to herself and a relative instead of pay her debt to the federal government.

Krusas surrendered herself Thursday afternoon to the U.S. Marshals Service and pleaded not guilty to the charge before U.S. Judge Andrew Rodovich. She was released on a $20,000 bond and had to turn over her passport.

Her attorney, Scott King, said he has known about the case for several months and that none of it has anything to do with her position as a city councilwoman.

“Her conduct as a public official has been above reproach,” he said.

King said that Krusas planned to stay on the City Council for now but they would discuss her future.

Not only does Krusas faces up to five years in prison on the felony count if convicted, but she would also immediately lose her office.

Virlissa Crenshaw, 42, of East Chicago — charged with theft from a local government entity and with filing a false tax return for the 2009 tax year.

The offenses relate to Crenshaw’s theft of cash bonds while working as a clerk for the Merrillville Town Court in 2008. Crenshaw was the only one responsible for the bonds during after hours. The Indiana State Board of Accounts discovered in an audit that the records books did not match the actual money collected.

Crenshaw is also being sued by the state for the missing money, and that lawsuit claims she would sometimes use bond money from one defendant to cover the missing bond from another defendant to cover her tracks.

Crenshaw, who is married to a nephew of Lake County Prosecutor Bernard Carter, signed a plea agreement filed in conjunction with the indictment admitting her guilt to all charges. The loss to the town of Merrillville is $176,763 and the tax loss to the United States is $55,203.

Crenshaw faces up to 10 years in prison for pleading guilty to the counts, although the government promises not to prosecute her husband with any criminal tax charges. The government will also recommend she serve the minimum of federal sentencing guidelines.

Crenshaw’s change of plea hearing is scheduled for Tuesday morning.

Manuel Montalvo, 38, of East Chicago — charged with two counts of filing false tax returns for the tax years 2009 and 2010. The indictment alleges that Montalvo, the former director of the East Chicago Public Library, overstated unreimbursed business expenses and medical/dental expenses by a total of $80,577.

It was unclear as of Thursday evening if Montalvo, who was arrested Thursday morning, had made his initial appearance. He faces up to three years in prison if convicted.

This is not Montalvo’s first brush with the law. Montalvo, who also once served as the Lake County Democratic Party secretary, was found guilty in 2010 of battery against two South Shore commuter railroad police officers, disorderly conduct and criminal tresspass. The conviction was in connection to a fight he got into with police while trying to get on a South Shore train.

He was sentenced to a year of court supervision and 40 hours of community service.

East Chicago City Councilman Juda Parks, 40 — charged with two counts of failure to file income tax returns for the tax years 2008 and 2009. Parks, who is also an East Chicago police officer, owes the IRS $10,123 in taxes for that time period.

Parks signed a plea agreement filed in conjunction with the indictment admitting his guilt to all charges and agreeing to cooperate with the government. The plea agreement says the total tax loss is $15,160, which he agrees to pay to the IRS along with any penalties and interest.

U.S. Attorney David Capp said Thursday that Parks has agreed to cooperate with the government’s “ongoing investigations.”

Parks, who was supposed to turn himself in Thursday, faces up to one year in prison. Because the charge is a misdemeanor, he can still continue to serve on the East Chicago City Council.

A change of plea hearing had not been scheduled as of Thursday evening.

Hammond City Councilman Alfonso Salinas, 52 — charged with receipt of a bribe by an agent of a local government receiving federal funds. Salinas is the District 2 councilman for Hammond and has held that office since 1995.

David Johnson, 56, of Munster, owner of Dave’s Tree Service — charged with payment of a bribe to an agent of a local government receiving federal funds.

The indictment alleges that Johnson paid Salinas $10,500 in exchange for Salinas giving Johnson $310,000 worth of work trimming trees in Salinas’ district. The money for the trees came from casino tax revenue that each Hammond council membees gets to benefit his or her district.

Salinas is also charged with four counts of willful failure to file tax returns for tax years 2006 through 2009.

The federal government has also filed a forfeiture allegation against Salinas, demanding he pay back the $10,500 to the government.

It was unclear if Salinas, who was arrested Thursday morning, or Johnson have had their initial appearance.

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